Turkmenistan is doing its best to attract foreign investors to what President Gurbanguly Berdymukhammedov (pictured above) says is his country’s “colossal economic potential and stability”. But while the potential is certainly there, the stability, at least for investors, is lacking. Turkenistan is ruled by an idiosyncratic form of authoritarianism and is permeated by arcane institutions and bureaucratic practices that pose big challenges to investors.
Last month, the economy ministry and the Chamber of Commerce and Industry of Turkmenistan organised the VIII International Investment Forum at the national tourist resort of Avaza, the state news agency reports. In his address to the forum, Mr Berdymukhammedov assured foreigners that their investments were secure. Read more
By Ariel Cohen, Atlantic Council
The mood is festive in the Russian capital, and expectations are high that Donald Trump’s elections may turn a new page in the difficult relationship between Moscow and Washington.
The death spiral of US-Russian ties stretches back through the Barack Obama years to George W. Bush’s second term, when Russia invaded neighboring Georgia. Things got as bad as during the darkest days of the Cold War, but now the time may have come to reverse course.
Mr Trump, Moscow’s logic goes, has a warm place in his heart for Russia’s long-serving president, Vladimir Putin. He expresses realpolitik instincts compatible with Putin’s worldview. Read more
One of the most striking features of the new cold war has been the aggressiveness with which the Russian state has turned the institutions of openness into weapons against the west while simultaneously denying its opponents the use of equivalent institutions at home.
Every facet of democratic life, from free speech to the independence of civil society, has been manipulated as part of the Kremlin’s strategy of information warfare. The same goes for western systems of justice. The rule of law doesn’t apply in Russia, especially when the interests of the governing elite are at stake. Courts function as an extension of Vladimir Putin’s power, convicting and sentencing his enemies on command. Yet the Russian state is able to avail itself of the west’s independent legal systems on the same basis as everyone else, and frequently does so to pursue its victims on foreign soil. Read more
For two decades China’s economy – second in size only to that of the US – roared ahead at annual double-digit rates of growth. This year, according to official data, it is growing at 6.7 per cent. The current rate would be significantly less were it not for the continued willingness of China’s authorities to pump increasing amounts of cash into overheated real estate, financial and state owned enterprise sectors.
The risks of this policy are substantial, not just to China’s economic prospects, but to world financial markets. Read more
for the FT's free emerging markets morning email briefings.
Select beyondbrics London
or beyondbrics New York
when you sign up here
By Tomasz Telma, IFC
If you want to see how quickly the developing world is urbanising—and the problems that this creates—look no further than Istanbul.
In 1990, Turkey’s commercial capital was home to about 6.5m people. By 2014, that number had more than doubled to 16m, creating an urban crush that has sparked everything from blackouts to 2 am traffic jams.
But Istanbul is far from alone. Its struggles echo those of many cities in the developing world, where a massive urban migration has stretched local infrastructure to a breaking point, entrenching poverty and driving up greenhouse gas emissions. Read more
Apple is to launch two new research and development (R&D) facilities in China, aiming to expand its presence in this burgeoning consumer market and facilitate closer working relationships with some of the world’s leading consumer electronics and hardware manufacturers. Whether this investment will reverse the trend of falling revenues, however, remains to be seen.
In September, it was revealed that Apple is planning to open a $45m research centre in Beijing, employing 500 people tasked with the development of innovative hardware. One month later, it was announced that a further R&D facility will go ahead in Shenzhen, Guangdong, an area often described as China’s ‘Silicon Valley’. Read more
By Kevin Martin, HSBC
China’s consumers are by no means the wealthiest in the world. But they are years ahead of their counterparts in many developed economies in terms of how they shop and pay for what they buy. In this, they are revolutionising the way consumer finance is conducted in the world’s second-biggest economy.
Like so many of the changes sweeping China, the uptake of internet and digital technologies has happened with head-spinning speed.
As recently as 2000, a mere 1.7 per cent of mainland Chinese were online. Now, the country has more than 700m internet users – a penetration rate of more than 50 per cent. Read more
September’s United Nations Summit for Refugees and Migrants at the General Assembly won pledges to increase official funding and resettlement to improve on 2015’s dismal record, when just over half of its appeal and one-tenth of slots were covered. Countries also endorsed preparation of a comprehensive medium-term plan detailing international community priorities and responsibilities in future emergencies.
However, the greatest breakthrough could be represented by private sector groups that organized their own support around the event, including the UN Global Compact for businesses dedicated to the Sustainable Development Goals, and President Barack Obama’s White House Call to Action, which drew initial commitments from 50 companies of hundreds of millions of dollars and innovative solutions to economic and practical challenges. Read more
The cornerstone of Vladimir Putin’s strategy for political longevity has been his projection of Russia as a besieged fortress fighting off the menacing encroachment of the US and other western powers. By presenting himself as the only leader capable of protecting Russia from those who seek to undermine her, the authoritarian president has skilfully managed to distract his people from the rapidly deteriorating economic conditions that would doubtless sink the leader of a more democratic country.
But the cost of maintaining a war footing is considerable, with massive spending on defence depriving the rest of the economy of much needed state support. Putin understands this well and Donald Trump’s election might provide him with an opportunity to rebalance public expenditure. Read more
Egypt’s agreement with the IMF on a $12bn, three-year loan will help finance Egypt’s import needs while cushioning the effects of the reduction in fuel subsidies and the floating of the pound, prior actions that had been demanded by the Fund. Egypt has already received the first tranche of $2.75bn after having secured $6bn in additional financing. Read more
It would be easy to become depressed about the outlook for climate policy. After all, the topic barely warranted a mention during the recent US election, except for occasional disparaging remarks from the now president-elect. But at this week’s UN climate conference in Marrakesh, delegates have attempted to build on the success of last year’s event in Paris, which delivered a watershed moment in the form of a long overdue agreement on emissions. This year’s conference could be remembered for an equally enduring landmark if the parties choose to accelerate a quiet revolution that is radically reshaping energy systems around the world.
Globally, 2.2bn people have no access to electricity or endure highly unreliable service and rely instead on a toxic mix of kerosene, paraffin, candles and wood. For a third of the world’s population energy is dangerous, erratic and ruinously expensive. Lighting can cost a poor household more than a hundred times what it does in rich countries. Some 4.3m people die each year from the effects of pollution from cooking alone. Read more
Latin America is experiencing its worst economic growth — projected to be negative this year – since the lost decade of the 1980s. At this crucial time, the United States is turning its back and stepping backward from Latin America while China takes further steps forward in its economic relations with the region.
President elect Trump has pledged to walk away from the Trans-Pacific Partnership (TPP) and the North American Free Trade Agreement (NAFTA), as well as steeply raise tariffs on Mexican manufacturing. He also says he will scrap the Dodd-Frank financial reform bill and engage in questionable fiscal and monetary policies. To top it off, he pledges to deport Mexican and other Latin Americans from the United States and build a wall so they can’t come back. Read more
The ideal financial customer is not who you think. First, she lives on about two dollars a day. Second, she lives in rural Africa, the Middle East, South Asia or Latin America. Finally, she’s never owned a financial account of her own.
What’s ideal about all that? Growth. And digital technology is the key to driving it. Read more
While the US was debating Russian hacking and leaks ahead of its elections, EU leaders met last month to discuss Moscow’s efforts to influence European liberal democracies through misinformation and propaganda. “We don’t have the tools to look at this centrally,” one senior EU diplomat complained, referring to a lack of cooperation between EU intelligence services. The official is right – but in a much deeper sense.
For 25 years, open societies saw themselves as the uncontested winners and expected that the remaining autocracies, with the help of western pro-democracy actors, would be relegated to the dustbin of history. So it is with disbelief that we are facing a thrust reversal. Read more
As the world descends on Morocco for the annual United Nations climate conference, the host nation is championing an unlikely hero: African agriculture.
After launching the ambitious Adaptation of African Agriculture (AAA) initiative in September, the Moroccan government seeks to mobilise $30bn of investment for the sector that is under the most significant threat from climate change, in the region that is the least equipped to deal with it. According to current estimates, the negative effects of climate change are already reducing Africa’s GDP by about 1.4 per cent, and the costs arising from adaptation to climate change are set to reach an annual three per cent of GDP by 2030. A principal victim of this is the agriculture sector, which not only feeds the chronically food-insecure continent, but forms the backbone of its economy and its route out of poverty. Read more
After struggling with a lack of dollars in its economy for over a year, the Egyptian central bank finally threw in the towel, moving to a liberalisation of the pound against the dollar to allow the market to set the rate and the economy to start moving again.
The initial range of devaluation is from 8.9/$ to 13/$, meaning the pound has more than halved from the level it was at during the Arab Spring. This is in line with where the black market rate has been in recent days as the economy ground to a halt, having appreciated from a rate of 18/$ over the weekend and from 15/$ last week. The uncertainty in the value of the pound over the last few weeks has caused an economy under pressure, with GDP missing its 5 per cent growth target at 3.8 per cent, to slow further, even as a series of deals were negotiated with the IMF, Gulf nations, the G7 and China for nearly $20bn in support once a series of reforms were implemented. Read more
An new era is opening up for Colombia, as the promise of peace, prosperity and opportunity becomes more and more tangible.
As Latin America’s oldest democracy and one of its most open, competitive and business-friendly economies, Colombia now looks to the world and especially to the UK for trading and investment ties. Read more
The global chemical industry has long been the best real-time indicator of the global economy. This is partly because of its size, as the third-largest industry in the world after agriculture and energy, but also because of its global and application reach. Every country in the world uses relatively large volumes of chemicals, and their applications cover virtually all sectors of the economy, from plastics, energy and agriculture to pharmaceuticals, detergents and textiles.
The first chart confirms the position, showing the latest IMF data for global GDP versus the American Chemistry Council’s (ACC) data for global chemical Capacity Utilisation (CU%) since 1988, in terms of percentage change from the previous year. Read more
By Raffaello Pantucci, RUSI
There has been much speculation on the role of the Silk Road Fund (SRF) and Asian Infrastructure Investment Bank (AIIB) in China’s outward investment push.
They are both instruments created by Beijing to provide economic firepower and bring international credibility to the ‘Belt and Road’ vision that has become President Xi Jinping’s keynote foreign policy concept. But in reality they have both undertaken a series of investments that, while substantial and linked to ‘Belt and Road’ countries, pale in size next to China’s overall outward investments. Read more
By Mouayed Makhlouf, IFC
Look out across the Middle East and North Africa (MENA), and you’ll see a rising tide of youth unemployment. In fact, MENA has the highest rate of official unemployment of any region in the world, averaging at around 11 per cent.
Those are sobering numbers – and a sign that the region hasn’t done enough to create opportunities for its young people. But unemployment in the Middle East and North Africa doesn’t need to be that high.
The region has a large number of companies, many in up-and-coming industries like information technology or logistics, which need workers. Yet job seekers just don’t have the technical skills that employers are looking for, causing many positions to remain unfilled. Read more